SEC News Digest

Commission Announcements

The Securities and Exchange Commission announced the temporary suspension, pursuant to Section 12(k) of the Securities Exchange Act of 1934 (the Exchange Act), of trading in the securities of China Changjiang Mining & New Energy Co., Ltd. (CHJI), a Nevada corporation previously known as North American Gaming and Entertainment Corporation with headquarters and operations in the People’s Republic of China, at 9:30 a.m. EDT on April 1, 2011, and terminating at 11:59 p.m. EDT on April 14, 2011.

Questions have arisen regarding the accuracy and completeness of information contained in CHJI’s public filings with the Commission concerning, among other things, the company’s financial statements for 2009 and 2010. CHJI has failed to disclose that (a) the company filed its last periodic report on Form 10-Q for the quarter ended Sept. 30, 2010 without the required review of the interim financial statements by an independent public accountant; and (b) the company’s independent auditor has resigned, withdrawn its audit opinion issued April 16, 2010 relating to the audit of the company’s consolidated financial statements as of Dec. 31, 2009, and informed the company that the financial statements for the quarters ended March 31, June 30, and Sept. 30, 2010 could no longer be relied upon.

The Commission cautions brokers, dealers, shareholders, and prospective purchasers that they should carefully consider the foregoing information along with all other currently available information and any information subsequently issued by the company.

Further, brokers and dealers should be alert to the fact that, pursuant to Rule 15c2-11 under the Exchange Act, at the termination of the trading suspension, no quotation may be entered unless and until they have strictly complied with all of the provisions of the rule. If any broker or dealer has any questions as to whether or not he has complied with the rule, he should not enter any quotation but immediately contact the staff in the Division of Trading and Markets, Office of Interpretation and Guidance, at (202) 551-5777. If any broker or dealer is uncertain as to what is required by Rule 15c2-11, he should refrain from entering quotations relating to CHJI’s securities until such time as he has familiarized himself with the rule and is certain that all of its provisions have been met. If any broker or dealer enters any quotation which is in violation of the rule, the Commission will consider the need for prompt enforcement action.

If any broker, dealer or other person has any information which may relate to this matter, they should immediately contact Marshall S. Sprung, Assistant Regional Director, Los Angeles Regional Office, at (323) 965-3320, or Junling Ma, Senior Counsel, Los Angeles Regional Office, at (323) 965-4539, or by e-mail at sprungm@sec.gov or maj@sec.gov. (Rel. 34-64164)

Sanjay Wadhwa Named Associate Regional Director For Enforcement in SEC New York Regional Office

Securities and Exchange Commission today announced the promotion of Sanjay Wadhwa to Associate Regional Director for Enforcement in the agency’s New York Regional Office.

Mr. Wadhwa joins the office’s two other Associate Directors for Enforcement – Andrew Calamari and David Rosenfeld. He has been serving as an Assistant Regional Director and as Deputy Chief of the Enforcement Division’s Market Abuse Unit. Mr. Wadhwa will immediately assume his new post, and will continue to serve as Deputy Chief of the Market Abuse Unit under the direction of Unit Chief Daniel M. Hawke.

“Sanjay is a very special blend: experienced securities lawyer, meticulous investigator, gracious colleague, and nurturing leader,” said George S. Canellos, Director of the SEC’s New York Regional Office. “His unique personal qualities and total dedication to the mission of the SEC make him ideally suited for senior leadership in the enforcement program.”

Robert Khuzami, Director of the SEC’s Enforcement Division, added, “Sanjay is one of our best and brightest, someone who demands of himself an extraordinary level of performance that serves to inspire those around him. I am very pleased to welcome him to the ranks of senior management.”

Mr. Wadhwa said, “I am honored by this appointment. It has been thoroughly enjoyable and a privilege to work in the Enforcement Division, and I look forward to continuing to work alongside the agency’s talented staff in serving and protecting the investing public.”

Since July 2003, Mr. Wadhwa has served in the enforcement program of the New York Regional Office, first as a senior attorney, then branch chief, and later Assistant Regional Director. In his new role, he joins the senior management team responsible for supervising a staff of approximately 180 attorneys, investigators, accountants and paralegals and oversight of all enforcement activities in the New York office.

Mr. Wadhwa was named Deputy Chief of the Market Abuse Unit when it was created last year.

Before joining the SEC staff, Mr. Wadhwa served for nearly seven years as an associate at the New York law firms of Cahill, Gordon & Reindel LLP, and Skadden, Arps, Slate, Meagher & Flom LLP. Mr. Wadhwa received an LLM in taxation from New York University School of Law in 1996, a JD from South Texas College of Law in 1995, and a BBA in Accounting from Florida Atlantic University in 1990. (Press Rel. 2011-80)

Enforcement Proceedings

The Securities and Exchange Commission announced today that on March 23, 2011, the Honorable Thomas C. Platt, United States District Court for the Eastern District of New York, adopted, in full, a Magistrate Judge’s previously-issued Report and Recommendation against Neurotech Development Corporation’s (Neurotech) sole officers, the father-son management team of Bernard Artz (chairman, chief executive officer and chief financial officer) and Lawrence Artz (vice president). Pursuant to the March 23 Order, Bernard Artz must pay a total of over $173,000 and Lawrence Artz must pay a total of over $141,000 in disgorgement of ill-gotten gains, prejudgment interest, and civil penalties.

The Commission originally filed its action against Neurotech, Bernard Artz and Lawrence Artz in October 2004. The complaint alleged that, between at least 1999 and 2003, Neurotech falsely claimed in Commission filings and press releases that it had: (i) sold and built prefabricated hospitals in China and Indonesia, and (ii) entered into billions of dollars of overseas construction contracts. The Commission’s complaint also alleged that the company made false public statements about possessing certain fraudulent “bank guarantees” it could purportedly use to finance the building of hospitals. The Commission also alleged that Bernard Artz and Lawrence Artz contemporaneously sold the company’s common stock into the market for illicit gains.

In April 2010, Neurotech reached a settlement with the Commission and Bernard Artz and Lawrence Artz agreed to partial settlements with the Commission. Bernard and Lawrence Artz consented to entry of judgments permanently enjoining them from violating Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act) and Rule 10b-5 thereunder (antifraud provisions), Section 16(a) of the Exchange Act (failure to make change of beneficial ownership filings), and aiding and abetting Neurotech’s violations of Section 13(a) of the Exchange Act and Rules 12b-20, 13a-1 and 13a-13 thereunder (reporting provisions). In addition, Bernard Artz consented to an injunction from violating Exchange Act Rule 13a-14 (false certification of Commission filings). Both individual defendants also consented to five-year officer and director and penny stock bars, and left disgorgement, prejudgment interest, and civil penalties to be decided by the Court. Neurotech settled the matter by consenting to the entry of a final judgment providing for a permanent injunction from violating Sections 10(b) and 13(a) of the Exchange Act and Rules 10b-5, 12b-20, 13a-1 and 13a-13 thereunder.

Thereafter, the court considered the issue of disgorgement, prejudgment interest, and civil penalties as to Bernard Artz and Lawrence Artz. The Order issued on March 23, 2011, adopting a recommendation by a Magistrate Judge, requires Bernard Artz to disgorge $131,414, plus prejudgment interest of $32,017.42, and pay a civil penalty of $10,000. Similarly, Lawrence Artz must disgorge $57,129.73, plus prejudgment interest of $79,846.92, and pay a civil penalty of $5,000. The Magistrate Judge stated that the recommended civil penalties were “third tier” penalties and that he considered the defendants’ financial conditions in his decision to not recommend higher penalty amounts. Under the Exchange Act, a “third tier” penalty is one where the violation involved fraud, deceit, manipulation, or deliberate or reckless disregard of a regulatory requirement, and such violation directly or indirectly resulted in substantial losses or created a significant risk of substantial losses to other persons. [SEC v. Neurotech Development Corporation, et al., 04-CV-4667 (Platt) (United States District Court for the Eastern District of New York)] (LR-21912)

On March 31, 2011, the United States District Court for the Southern District of Florida granted the Commission's motions for summary judgment against the two remaining defendants in a civil action originally filed in November 2007. The judgment permanently enjoins Joseph J. Monterosso and Luis Vargas from violations of the antifraud and other securities law provisions. The Court ordered that a magistrate judge would determine the amount of disgorgement and penalties that the defendants would pay.

The Commission brought civil actions against Monterosso and Vargas in connection with GlobeTel Communications Corp., now Sanswire Corp. (GlobeTel). GlobeTel reported millions of dollars in telecommunications revenue from 2002 to 2006 that the Commission alleged were fake. Two former GlobeTel executives were sentenced to prison as a result of parallel criminal prosecutions. See U.S. v. Huff, 09-cr-60295-DMM (S.D. Fla.); U.S. v. Jimenez, 08-cr-60367-DTKH (S.D. Fla.). Sanswire Corp. and three former executives, including the two sentenced to prison, previously consented to the entry of judgments against them in the Commission’s action.

The Commission’s complaint against Monterosso and Vargas alleged that they created hundreds of false invoices that made it appear that GlobeTel's three wholly-owned subsidiaries, Centerline Communications, LLC (Centerline), Volta Communications, LLC (Volta), and Lonestar Communications, LLC (Lonestar) bought and sold telecom "minutes" with other wholesale telecom companies. The complaint alleged that, in reality, there were no transactions under the program that GlobeTel executives described as the "off-net" revenue program. It alleged that two of GlobeTel's subsidiaries - Volta and Lonestar - actually did no business. It alleged that the third subsidiary, Centerline, reported millions of dollars in business with Monterosso's and Vargas' own private company, Carrier Services Inc. (CSI), which did not occur.

The court found that the Monterosso and Vargas violated Section 10(b) of the Securities Exchange Act of 1934 (Exchange Act), Rule 10b-5(a) promulgated thereunder, and Section 17(a)(1) of the Securies Act of 1933 (Securities Act) by their direct involvement in a scheme to report fraudulent “off-net” revenue.

In addition, the court found that Monterosso and Vargas violated Rule 13b2-1 promulgated under the Exchange Act and aided and abetted GlobeTel’s violated Sections 13(a) and 13(b)(2)(A) of the Exchange Act and Rules 12b-20, 13a-1, and 13a-13 promulgated thereunder.

The Commission acknowledges the assistance of the Internal Revenue Service, the Federal Bureau of Investigation, the Tax Division of the United States Department of Justice, and the United States Attorney’s Office for the Southern District of Florida. [SEC v. Joseph J. Monterosso, et. al.,Civil Action No. 07-61693 (S.D. Fla.)] (LR-21913; AAE Rel. 3256)

Investment Company Act Releases

Eaton Vance Management, et al.

An order has been issued on an application filed by Eaton Vance Management, Eaton Vance ETF Trust, and Foreside Fund Services, LLC, to permit: (a) series of certain actively managed open-end management investment companies to issue shares (Shares) redeemable in large aggregations only (Creation Units); (b) secondary market transactions in Shares to occur at negotiated market prices; (c) certain series to pay redemption proceeds under certain circumstances more than seven days from the tender of Shares for redemption; (d) certain affiliated persons of the series to deposit securities into, and receive securities from, the series in connection with the purchase and redemption of Creation Units; and (e) certain registered management investment companies and unit investment trusts outside of the same group of investment companies as the series to acquire Shares. (Rel. IC-29620 – March 30)

Jackson National Life Insurance Company, et al.

A notice has been issued giving interested persons until April 22, 2011, to request a hearing on an application filed by Jackson National Life Insurance Company (Jackson), Jackson National Separate Account - I, Jackson National Life Insurance Company of New York (JNLNY), JNLNY Separate Account I, and Jackson National Life Distributors LLC (collectively, Applicants). Applicants seek an order under Section 6(c) of the Investment Company Act to exempt certain transactions from the provisions of Sections 2(a)(32), 22(c), and 27(i)(2)(A) of the Act and Rule 22c-1 thereunder, to the extent necessary to permit the recapture, under specified circumstances, of certain contract enhancements applied to purchase payments made under deferred variable annuity contracts issued by Jackson and JNLNY. (Rel. IC-29621 – March 31)

Self-Regulatory Organizations

Approval of Accelerated Delivery of Supplement to the Options Disclosure Document and Amendment to the Options Disclosure Document Inside Front Cover

The Commission granted approval to the accelerated delivery of a supplement to the options disclosure document, submitted by The Options Clearing Corporation (SR-ODD-2011-02) pursuant to Rule 9b-1 under the Securities Exchange Act of 1934, regarding disclosures on variability index options and relative performance index options and amendment to the options disclosure document inside front cover. Publication is expected in the Federal Register during the week of April 4, 2011. (Rel. 34-64154)

Approval of Proposed Rule Change

The Commission approved a proposed rule change submitted by NASDAQ OMX PHLX (SR-Phlx-2011-15) pursuant to Rule 19b-4 under the Securities Exchange Act of 1934 to expand the $2.50 Strike Price Program. Publication is expected in the Federal Register during the week of April 4, 2011. (Rel. 34-64157)

Immediate Effectiveness of Proposed Rule Changes

A proposed rule change filed by National Stock Exchange (SR-NSX-2011-03) to enable the use of a replace message to modify the display quantity of a reserve order, and certain other conforming changes to exchange rules, has become effective under Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 4, 2011. (Rel. 34-64158)

A proposed rule change filed by the Chicago Board Options Exchange to expand the $2.50 Strike Price Program (SR-CBOE-2011-029) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 4, 2011. (Rel. 34-64159)

A proposed rule change filed by The NASDAQ Stock Market to expand the $2.50 Strike Price Program (SR-NASDAQ-2011-041) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 4, 2011. (Rel. 34-64160)

A proposed rule change filed by NASDAQ OMX BX to amend the BOX Rules to expand the $2.50 Strike Price Program (SR-BX-2011-017) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 4, 2011. (Rel. 34-64161)

A proposed rule change filed by NYSE Arca to expand the $2.50 Strike Price Program (SR-NYSEArca-2011-13) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 4, 2011. (Rel. 34-64162)

A proposed rule change filed by NYSE Amex to expand the $2.50 Strike Price Program (SR-NYSEAmex-2011-22) has become effective pursuant to Section 19(b)(3)(A) of the Securities Exchange Act of 1934. Publication is expected in the Federal Register during the week of April 4, 2011. (Rel. 34-64163)

Securities Act Registrations

The following registration statements have been filed with the SEC under the Securities Act of 1933. The reported information appears as follows: Form, Name, Address and Phone Number (if available) of the issuer of the security; Title and the number and/or face amount of the securities being offered; Name of the managing underwriter or depositor (if applicable); File number and date filed; Assigned Branch; and a designation if the statement is a New Issue.